Is it possible to get rich from trading digital options?
Digital options is heavily marketed as a high return investment product; however, what is the likelihood of hitting the 7 figure mark? In order to answer this, we are going to take a deep dive into the industry, and the main differences between the sharks of digital options and those who flush money down the drain.
Firstly, sorry to disappoint, but digital options isn’t an easy way of making money. Even a monkey can be trained to hit one of two buttons whenever they see a signal. However, making consistent returns from digital options is another case altogether, which is why more than 80% of traders on top platforms fail to make a profit.
Saying that, this article is about whether it is possible? Yes, some people make an excellent living trading digital options, but they approach it differently to most traders.
Do your due diligence
Firstly, before you make a deposit, it is essential that you do your due diligence on your chosen platform. Find out whom they are regulated by, how long they have existed for and how easy it is to make a withdrawal. An individual with the right technical knowledge and marketing capital can easily set up a website, take millions of dollars in deposits and run away. People have lost their life savings because they failed to take a few hours to conduct proper research.
Secondly, practice using a demo account. This enables you to get comfortable with how digital options works. It also enables you to implement the tactics learned from training systems. There is no one foolproof strategy for trading digital options. Even if there was you would never hear about it, because the individual would use it to expand into forex, CFDs (Contract for Difference), etc., and become the richest person on the planet. It is up to you to take information from reputable sources, and develop your own strategy.
As a general rule, you should be aiming to win 70% of your trades on the demo account. In order to make a return on digital options, you need to win 60% of trades. The 70% target ensures that you make a significant return while giving you a cushion in case you hit a slump in form.
Approach digital options with a strategic mind
Notably, digital options is marketed towards those without an investment background. The possibility of loss is rarely mentioned. All you see are influencers with Lamborghinis, mansions and living it up by the beach. In a world where most people live paycheck-to-paycheck and struggle to save, these images can be very attractive. You need to put those images aside and approach digital options with a strategic mind. After each session on a demo account, assess why you lost or won on each trade. Guesswork isn’t a solid long term strategy.
This might be a bit controversial, but I don’t advise anyone to get into debt in order to trade digital options. Some ‘gurus’ will push you to use your credit card to buy their courses and trade because you will “definitely” make it back. In digital options, you don’t own an asset. You either make a win or you lose your overall investment on that trade. Therefore, there is the possibility of racking up a lot of debt. Let’s not forget the high interest of most credit cards.
If you don’t have any disposable income for trading, it might be time to assess your lifestyle, get a second job or start a low-cost service-based business.
Do your research
Top digital options traders take the time to read the market and make an analysis. They look for ‘hidden’ value. As a result, they get leverage and are less likely to make losing trades. The key is to make data-backed decisions. At the end of each trading session, they review their wins and losses, and make adjustments where necessary. This isn’t fun or exciting, but it works.
Here are some of the indicators they use:
– Moving Averages
– Relative Strength Index
If the above terms sound unfamiliar, you aren’t ready to become an elite trader.
Focus is a top priority
A less often discussed aspect of trading digital options is the mentality required. You need a high level of focus in order to succeed. This isn’t a causal pursuit you can do while catching up on Facebook or watching television. Top traders clear their schedule, turn off smartphone notifications and sounds, and even tell their family to leave them alone while they trade. This is because they need to make a lot of decisions very quickly.
Trades with the highest potential returns are the 30-second turbo options. Arguably, it is wiser to opt for longer expiry options because there is more time to make an assessment. You would have a lower return per winning trade; however, you also increase accuracy. Over the mid to long term, this can put you ahead of investors who prefer much riskier trades.
To conclude, it is possible to get rich from trading digital options; however, it isn’t easy. The commitment and perseverance required are rare in most people. However, if you are willing to commit, it could make you very wealthy.